Crash Course in BEE – B-BBEE in 5 minutes
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What is BEE?BEE, or more accurately B-BBEE refers to Broad Based Black Economic Empowerment is a policy of the SA government which encourages companies to help transform the country. BEE is about broad-based activities that benefit black people. Definition: Black means African black, coloured or Indian people who ARE South African citizens by birth or became a South African citizen before 27th April 1994. NB the definition of coloured now also includes Chinese BEE compliance is measured by means of a scorecard (a broad based scorecard). The scorecard is based on various elements and your company is measured out of a maximum of 100 points (in some cases it is possible to obtain more than 100 points). The BEE Codes of Good Practice is a government document that describes how the scorecard works. The elements on which you are rated is what make BEE broad-based. It covers various aspects of the economy, society and the company.
The five elements
- Ownership – this measures the percentage of shares in the business that are owned by black people (as per the definition above)
- Management Control – the directors, top management and the employees in the business
- Skills development – this measures the amount of money spent of training of black employees
- Enterprise and Supplier development – Procurement (your suppliers and their scores) and Development – your spend on helping other black owned enterprises grow, both suppliers to you and non suppliers.
- Socio-Economic Development – your spend on assisting charitable organisations
|Above 100 points||Level 1|
|95-100 Points||Level 2|
|90-95 Points||Level 3|
|80-90 Points||Level 4|
|75-80 Points||Level 5|
|70-75 Points||Level 6|
|55-70 Points||Level 7|
|40-55 Points||Level 8|
|Less than 30 Points||Non-compliant|
Types of CompaniesThe codes define three types of companies;
- EME below R10 million
- EME – exempt micro enterprise – a company that has an annual turnover of less than R10 million. These companies are automatically given a BEE score of 65 points (level 4), and if majority black owned, level 2 and if 100% black owned, level 1
|Enterprise & Supplier Development||33||44|
- Only use an accredited agency
- It is not mandatory to use a verification agency, though it does ad credibility to your scorecard.
- The verification agency is not allowed to consult to you. Their only job is to verify the accuracy of the information presented to them.
- If you do not have accurate evidence you will earn no points!
The EconoServ 10 Step Process to BEE compliance
- Learn about BEE
- Look at where BEE is likely to affect you
- Look at the indicators to find ways of scoring points
- Collect documents around the indicators where points can be scored
- Do an initial calculation to find out how many points you have achieved
- Design your BEE report, Scorecard, Profiles, policies and Strategies around BEE and display your scorecard level
- Spend time and effort and earn the points
- Do a final self-rating – must be signed once you are completely happy with it
- Look for ways to find more points on the scorecard
- get an independent organisation to sign off your scorecard